Jing Lou Spends CN¥7.8m On 3SBio Stock
Those following along with 3SBio Inc. (HKG:1530) will no doubt be intrigued by the recent purchase of shares by Jing Lou, Co-Founder of the company, who spent a stonking HK$7.8m on stock at an average price of HK$16.00. There's no denying a buy of that magnitude suggests conviction in a brighter future, although we do note that proportionally it only increased their holding by 0.9%.
The Last 12 Months Of Insider Transactions At 3SBio
In fact, the recent purchase by Co-Founder Jing Lou was not their only acquisition of 3SBio shares this year. Earlier in the year, they paid HK$15.25 per share in a HK$7.9m purchase. So it's clear an insider wanted to buy, at around the current price, which is HK$15.44. While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We do always like to see insider buying, but it is worth noting if those purchases were made at well below today's share price, as the discount to value may have narrowed with the rising price. The good news for 3SBio share holders is that an insider was buying at near the current price. The only individual insider to buy over the last year was Jing Lou.
Jing Lou purchased 1.01m shares over the year. The average price per share was HK$15.62. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!
Check out our latest analysis for 3SBio
There are always plenty of stocks that insiders are buying. If investing in lesser known companies is your style, you could take a look at this free list of companies. (Hint: insiders have been buying them).
Insider Ownership
For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. It's great to see that 3SBio insiders own 5.9% of the company, worth about HK$2.3b. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Does This Data Suggest About 3SBio Insiders?
It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. Along with the high insider ownership, this analysis suggests that insiders are quite bullish about 3SBio. That's what I like to see! While it's good to be aware of what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Case in point: We've spotted 1 warning sign for 3SBio you should be aware of.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.